Smartphones Will Influence $689 Billion in Retail Store Sales by 2016

Published on: 27th Jun 2012

Note -- this news article is more than a year old.

Smartphones currently influence 5.1 percent of annual retail store sales translating into $159 billion in forecasted sales for 2012 according to new Deloitte research. For the first time in the industry the in depth study measures the "mobile influence factor " or impact of smartphones on in stores sales.

Deloitte anticipates mobile's influence, based on consumers' smartphone use,
will grow to represent 19 percent of total store sales by 2016, amounting to
$689 billion in mobile-influenced sales. By comparison, direct mobile commerce
sales will pass the $30 billion mark by that time, according to industry
estimates.)

"Mobile devices' influence on retail store sales has passed the rate at
which consumers purchase through their devices today," said Alison Paul,
vice chairman, Deloitte LLP and retail & distribution sector leader.
"Consumers' store-related mobile activities are contributing to - not
taking away from - in-store sales, and our research indicates that smartphone
shoppers are 14 percent more likely to convert and make a purchase in the store
than non-smartphone users. This means that mobile is an important tool for
retailers to incrementally drive traditional in-store sales, strengthening the
relationship between retailer and consumer to increase engagement and
loyalty."

Smartphone shoppers are more frequent buyers

To better understand the growing impact of mobile devices on the retail
sector, Deloitte's retail & distribution practice and Deloitte Digital
conducted an in-depth survey of U.S. consumers about how they use their
smartphones to shop today and their likelihood of using them in future buying
decisions. Deloitte Digital is a global service line focused on helping clients
harness disruptive technologies to transform their businesses.

Nearly half (48 percent) of smartphone owners surveyed say their phones have
influenced their decision to purchase an item in a store, and the study shows
that consumers' smartphone use tends to be highest at or near the point of
purchase. Based on Deloitte's survey, more than 6 out of 10 (61 percent) of
smartphone owners who use their devices to shop have done so while shopping at
the store, and more than half (52 percent) reach for their phones on the way to
the store.

Smartphone-toting consumers appear more likely to make a purchase than those
who do not own one or do not use it to assist in-store shopping. When asked
about their most recent shopping trip, nearly three-quarters (72 percent) of
smartphone owners surveyed indicated they made a purchase on that day, compared
with 63 percent of respondents who did not use a phone. Smartphone users were
also more likely to eventually make a purchase: among those who did not buy
anything on their last trip, 59 percent of those who used a smartphone
eventually made a purchase, compared to only 22 percent of those who did not use
one.

Wanted: Mobile applications

Mobile applications appear to be the inroads to consumer engagement. Nearly
four out of 10 (37 percent) smartphone owners surveyed who used a smartphone on
their last shopping trip utilized a third-party mobile shopping application, and
more than one-third (34 percent) used a retailer's mobile application.

"Retailers that do not engage shoppers through specialized mobile
applications or targeted smartphone-based promotions leave the door open for
competitors to reach a customer who is standing in the retailer's store and at
the point of purchase," said Kasey Lobaugh, principal and
direct-to-consumer and multichannel leader, Deloitte Consulting LLP. "To
make the connection with consumers, retailers need to understand how mobile
shoppers are willing to interact with their specific store category, format and
merchandise, both inside and outside the store, and customize their mobile
strategy around the shopper's needs and experience."

Mobile shopping accelerating among smartphone owners

Smartphone adoption coupled with consumers' propensity to use their devices
for shopping also contributes to the growing mobile influence factor. As
consumers buy smartphones, they are quick to tap their devices for shopping
assistance, with smartphone use for store-related shopping increasing 40 percent
after the first six months of ownership, according to Deloitte's survey. Once
these consumers are on board, they consistently use their phones for 50 to 60
percent of their store shopping trips, depending on the store category.

The mobile influence factor is strongest among younger shoppers, suggesting
that as this segment ages, a retailer's core customers will increasingly be
armed with smartphones. In Deloitte's survey, nearly 7 out of 10 smartphone
owners (67 percent) between 14 and 34 years old have used their devices to shop,
and 55 percent indicate their smartphones have influenced their decision to make
a purchase.

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